NZOG updates Barque analysis upon recent Tui exit

New Zealand Oil & Gas has updated its analysis of the Barque prospect offshore South Canterbury and North Otago.

Offshore staff

WELLINGTON, New ZealandNew Zealand Oil & Gas (NZOG) has updated its analysis of the Barque prospect offshore South Canterbury and North Otago, saying that it “believes there is more potential than previously thought.”

Analysis of the prospect in the Clipper permit, PEP 52717, has been under way since a 3D seismic survey was completed at the end of 2013. It revealed up to three horizons in the structure, NZOG said. Best estimates of unrisked petroleum in place (100%) in the three horizons now total 11 tcf, and 1.5 Bbbl of oil or gas condensate within the proven petroleum system.

The primary reservoir target is estimated to contain 5.5 tcf of gas (best estimate, unrisked, in place) and 785 MMbbl of associated condensate (best estimate, unrisked, in place).

NZOG said it is in discussion with potential partners to drill the prospect, and is presenting the farm-in opportunity internationally.

The Barque horizon volume represents an upgrade from the June 2015 quarterly report of 530 MMbbl of oil (265 MMbbl net to New Zealand Oil & Gas, best estimate of unrisked prospective resource) due to further detailed work on the possibility of gas recycling and viability of subsequent gas-to-shore development options. The company has said this is equivalent to at least twice the amount of producible gas in Taranaki’s Maui discovery, which has been producing since the 1970s.

If all three horizons were developed simultaneously, a gas-to-shore LNG project is considered the most likely model. It could yield 8.2 tcf of raw gas, of which 4.8 tcf could be available for conversion to LNG, plus 8.5 million metric tons of LPG and almost 600 MMbbl of condensate (100%, best estimate, unrisked, prospective (recoverable) resources).

Additionally, the company said it has undertaken scoping development work and identified several development concepts. The preferred gas recycling development concept could yield a 460-MMbbl gas condensate field, as well as 1.3 tcf of gas from one horizon alone (100%, best estimate, unrisked, prospective (recoverable) resources).

The Barque prospect lies in about 800 m (2,624 ft) of water, approximately 60 km (37 mi) from shore east of Oamaru. The target formations lie between 2,500 and 3,000 m (8,202 and 9,842 ft) below mean sea level. The company was granted an extension to the Clipper permit in October 2016.
New Zealand Oil & Gas is the operator and holds a 50% interest in PEP 52717. Its joint venture party is Beach Energy (50%).

It is the second announcement in about a week from NZOG. On Feb. 14, it accepted an offer from the Kuala Lumpur-basedTamarind Management Sdn Bhd for its 27.5% interest in the Tui area oil fields off Taranaki, New Zealand.

NZOG received $750,000 in exchange for all shares in its Tui holding company, Stewart Petroleum. Tamarind in December 2016 agreed to purchase the 57.5% interest of the operator, AWE Ltd.

Stewart Petroleum’s assets and liabilities include a 27.5% interest in the Tui field, and inventory of $4.7 million of oil. Working capital of $6 million will be transferred to Tamarind, which will also assume all field retirement obligations. The effective date of the transaction is Jan. 1, 2017.

“New Zealand Oil & Gas analyzed the Tamarind offer and finds it compelling based on Tamarind’s specialist end-of-field-life capability, including optimizing late stage production and abandonment operations,” said Andrew Jeffries, NZOG’s acting chief executive, appointed August 2016.

“Since the Pateke-4H well went into production in April 2015, Tui production has been in-line with our expectations and our valuation of this transaction secures that production profile in today’s dollars, while it also means we minimize financial risks associated with the abandonment of the facility. We are pleased that Tamarind shares our value perspective,” Jefferies concluded.

02/22/2017

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